New Orleans has lost a huge number of jobs as a result of Hurricane Katrina. But right now, the city is experiencing a labor shortage. Fast food outlets are offering signing bonuses and paying premium wages to new hires. Other businesses also are scrambling to find enough workers.

JOHN YDSTIE reporting:

I'm John Ydstie in New Orleans.

Despite the hundreds of thousands of people thrown out of work by the hurricanes, employers reopening their doors here are scrambling to find workers. All up and down Veterans Boulevard in Jefferson Parish, there are `help wanted' signs. There's a big blue-and-white banner in front of the Best Buy store that says `Now hiring.'

Unidentified Man #1: All right. Let's get this rung up. I got it by the back door tagged. I'll get it all the way out to the back for you and it'll be ready for you to pick up.

Unidentified Man #2: So just drive around out back?

Unidentified Man #1: Just drive around and you'll be home in a half-hour with a new refrigerator.

Unidentified Man #2: All right.

YDSTIE: This store is buzzing with people replacing flooded appliances and computers. Operations manager Tony Hines(ph) says about a third of the workers from this store can't make it back because their homes were destroyed.

Mr. TONY HINES (Store Operations Manager, Best Buy): We've had a considerable response to our banners that were hanging outside. We're getting quite a few applicants per day. We're roughly hiring 10 to 15 people per day.

YDSTIE: Hines says he's not sensing a labor shortage; there are plenty of good applicants. He says he's not raising wages to attract anyone.

But over at a kiosk, 20-year-old Quincy Jones(ph) is applying for a job. The restaurant he used to work at is flooded. He's expecting more than the $8 minimum starting wage offered here.

Mr. QUINCY JONES: At least. 'Cause in the restaurant, we was getting, you know, nice money. And we're looking for something around at least--I mean, 10 and up, you know, 'cause we got bills.

YDSTIE: Evidence at other firms suggest that workers like Quincy may have the upper hand, at least in the service sector. Over in the Uptown section of New Orleans, at the corner of Washington and Magazine, people are waiting for lunch at a trendy new restaurant called Table One. Manager David Roach says he can't find enough help.

Mr. DAVID ROACH (Manager, Table One): I don't think there's one place in this city that has ample employees at this moment.

YDSTIE: Are you seeing upward pressure on wages as a result?

Mr. ROACH: Not yet. A lot of my employees are just happy to be back and working. That's not an issue right now. But I'm sure I can see in the next coming months that--they have the bargaining power at this moment. And it will; that's the law of supply and demands, you know. It's going to happen eventually.

YDSTIE: In fact, it's happening already here. Burger King is offering signing bonuses of $6,000 for full-time workers. Downtown at the Sheraton Hotel on Canal Street, spokesman Bruce Hicks says the hotel is housing returning workers whose homes have been destroyed and paying them more.

Mr. BRUCE HICKS (Spokesman, Sheraton Hotel): Every employee was paid through September regardless. Those who came back to work were paid extra and are on a premium pay rate. And that premium pay rate is going to be in place for sometime probably, and the new market rate in New Orleans will be changed.

YDSTIE: While many local workers are not able to return yet, this city is attracting lots of others anxious for work. On Elk Street next to the Tulane Medical School, four young Brazilians in white biohazard suits are sprawled on the sidewalk taking a break. They've been brought here by the disaster cleanup firm Belfor. One of them, named Siskai(ph), says they're getting $8 an hour plus room and board.

SISKAI (Worker): For instance, working one day here, I pay my child support in Brazil. That's why I'm here.

YDSTIE: Are you staying for a month, a week, how long?

SISKAI: Well, months. They told us months.

YDSTIE: The influx of workers from outside is creating some resentment here. Mayor Ray Nagin told a business conference yesterday that New Orleans didn't want to be overrun by Mexican workers. Nagin also expressed support for an upward pressure on wages.

Mayor RAY NAGIN (Democrat, New Orleans): The days of haves and have-nots is over. And as you hire...

(Soundbite of applause)

Mayor NAGIN: As you hire people, if you're hiring anybody below 8, $10-an-hour wage, you're not going to play the game very long. You're not going to find workers.

YDSTIE: Whether wage increases will stick depends on a lot of things; how many local workers make their way home, how many business decide to rebuild and reopen. Mayor Nagin says he wants to create a new, more diversified economy here, one that can support higher incomes at all levels of society. John Ydstie, NPR News, New Orleans.

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